10 Surefire Signs You’ll Ruin Your Financial Life and Die With Debt

For many Americans, debt is a way of life. Loans allow most Americans to pay for their cars, education, and houses. But how much debt it is too much? Consider these statistics: U.S. households hold an average of more than $15,000 in credit card debt. College graduates owe an average of more than $33,000 in student loan debt with the class of 2014 graduating as the most indebted ever. And the average mortgage debt is around $154,000.

It’s no surprise that more Americans are taking on debt at the expense of saving, but now an increasing number of younger Americans are taking on more debt too — and paying it off at a slower rate. A recent study by The Ohio State University found that younger generations are adding credit card debt into their 70s, with many who still owe money after they die.

“Our projections are that the typical credit card holder among younger Americans who keeps a balance will die still in debt to credit card companies,” said Lucia Dunn, co-author of the study and professor of economics at Ohio State University.

The results of the study suggest that a person born between 1980 and 1984 has credit card debt substantially higher than debt held by the previous two generations: on average $5,689 higher than his or her “parents” (people born 1950-1954) at the same stage of life and $8,156 higher than his or her “grandparents” (people born 1920 to 1924).

As Americans accumulate more debt to pay for their livelihoods, it’s important to focus on paying off your loans — or you might end up dying in debt. Watch out for these 10 telltale signs that you will be in debt forever:

1. You don’t know how much debt you have.

Can you answer this question: How much debt do you have? If you can’t answer immediately, you have a problem. How can you ever get out of debt if you don’t know how much you have in the first place? Many Americans become desensitized to the amount of debt they carry, simply because there’s so much of it. A person destined to stay in debt forever might say: “Why not tack on $5,000 more to my pile of $75,000?”

But the further and further you stray from zero, the longer and more difficult it will be to pay off all that debt. If you don’t know how much debt you’re carrying, you need to add it all up and let it sit with you. Be honest with yourself. Feel how heavy $30,000, $90,000, or $250,000 in debt really is. Write down the actual dollar amount and realize that it will be stuck with you forever if you don’t start trying to pay it down.

2. You think an increase in income equals an increase in spending.

You’ve heard of the song “Mo Money Mo Problems” by rapper Notorious B.I.G.? An irresponsible person might equate more money with more problems because he or she spends money poorly. In truth, having money shouldn’t be a bad thing. Whether you get a promotion at work, win a contest, or inherit a large chunk of change — these funds should be used responsibly. That is, the extra income should be used to beef up your emergency savings, pay down one of your loans, or to put a serious dent in the amount of debt you have. Unfortunately, the highly indebted don’t spend money responsibly. They think that having money is an open invitation to spending it — without thinking about the long-term future.

3. You can’t keep from using your credit card.

If you’re using your credit card to pay for everyday items because you need to get by, you’re certainly not alone. That’s one reason why many low-income families rack up debt so quickly — there’s simply no alternative. But understand that swiping your credit card so often will not help you manage your debt responsibly.

If you can’t afford to buy everyday items like groceries without a credit card, then you might need to seek government or outside help before you find yourself buried under a mound of debt. On the other hand, if you find yourself swiping your credit card carelessly because you can, be careful. There are countless stories of big-time celebrities or bigwigs who have gone from rich to broke because of careless spending habits. So whether you swipe because you need something or want it, using your credit card like it’s a bank account is a surefire way to end up in deep debt.

4. You rely on credit card fixes to pay for debt.

Folks destined to die in debt rely on nonsensical, temporary, or ineffective solutions to take care of their debt for the month or time being. The highly indebted might transfer all of their debt from a single credit card onto another one, which might have no interest for a year. He or she will accept the high fees that come with a balance transfer just so to buy more time to pay off their debt.

The highly indebted might use one credit card to make a payment on another high-interest card, not realizing that making a $100 minimum payment might cost up to $30 in interest. He or she merely reshuffles their debt without really reducing the outstanding amount. If you’re someone who struggles to make minimum payments on your debt, don’t rely on quick-fix solutions to get through the month — you’ll only end up digging a bigger hole for yourself and remaining in debt forever.

5. You find yourself taking out more payday loans.

Someone who is destined to be in debt forever is likely to rely on payday loans. These small loans allow someone to borrow money with a pledge to repay the loan with their next paycheck or benefit check. They are a quick way to get cash, especially for someone who is in a jam. But paydays loans are a trap. A recent study by the Pew Charitable Trusts found that payday lenders in some states charge a whopping average of 582 percent annual interest. Much like using a credit card to delay or fix your debt problems, relying on payday loans will only do you more harm than good in the long run.

6. You rely on friends and family too often.

Asking friends and family for financial help isn’t a bad thing — especially in an emergency situation. But consistently turning to your friends and family as a form of financial aid is a sign that you’re in serious financial trouble. It means you haven’t built up enough of an emergency fund, indicates you have significant financial issues, and signifies a lack of responsibility.

Why do you need someone to bail you out of your financial troubles so often? Relying on your loved ones to help you out in times of need won’t help you build financial independence. It might even cause tension if your loved ones start billing you for their help, making a bad financial situation where you’re drowning in debt even worse.

7. You get turned down for a loan.

If you’ve applied for a loan or line of a credit and been turned down, it’s not a good sign. If you find out that you’ve been turned down because the lender thinks you can’t repay the amount you want to borrow — as opposed to there being a mistake on your credit report — it means you’ve been irresponsible with your money. The lender doesn’t want to take a chance on you because it’s likely that you won’t be able to repay the loan. That signifies serious money mismanagement — and if you don’t take steps to resolve your financial issues, you might end up in even more financial trouble. Getting turned down for a loan isn’t a sign that you might end up in debt forever in and of itself, but it’s a serious wake up call that you might have a severe problem.

8. You avoid creditors.

If your creditors are calling you to collect payments that are past due, it’s a bad sign. Not only does that mean you aren’t paying your bills on time, it’s also an indication that you don’t even have the money to pay up. Ignoring these types of phone calls might help you buy some time to avoid paying in the short term, but it won’t solve your debt issues.

If creditors are after you, they will find a way to get to you eventually. Even worse, not taking care of your debt issues will only ruin your credit — something that could haunt you for the rest of your life. Unless you plan to keep running away, you need to confront your debt woes sooner rather than later.

9. You constantly lie about money.

If you can’t be honest with a spouse, family member, or close friend about your financial situation, you’re headed down a dangerous path. Lying about spending a significant amount of money or downplaying your debt indicates a major problem. After all, you wouldn’t have to lie about your money if you weren’t in a bad place financially. While lying about spending a small amount here or there isn’t healthy, when you feel embarrassment about racking up a large amount of debt or your quality of life suffers due to your financial situation, it’s time to fess up and get help.

The highly indebted start out telling little fibs, but then end up lying about their dire financial situation until it’s too late. Even when acknowledging their financial shortcomings, he or she might suffer from selective amnesia. A common lie they tell might be like this: “I had to use the credit card because I needed to eat. I just got behind on payments and somehow I’m now thousands of dollars in debt.” Stop lying to yourself. You know how you racked up that debt and it’s time you did something about it — or risk ending up forever in debt.

10. You ignore all the warning signs.

If you’ve read all of these signs indicating how you might die deep in debt — and even acknowledged displaying some of the behaviors — it’s time to take action. It’s one thing to realize you have a problem with your debt, it’s another to continue your poor money management habits. Your irresponsible spending has gotten you into a dire, but fixable situation. Now you must to take action — or you’ll go to your grave with debt collectors knocking on your door.